Provisions of the programme, however, also require that to be eligible for such incentives, renewable energy projects include a minimum quota of goods and services deriving from Ontario - in the case of wind, 25 percent, and for solar projects, 60 percent.Such a, “discriminatory measure,” said Japan in its statement before the panel in March this year, “is designed to promote the production of renewable energy generation equipment in Ontario rather than to promote the generation of renewable energy.”
Canada, on behalf of Ontario, instead portrayed the measure as government procurement necessary to facilitate a move toward green energy production. If the argument was accepted, the measure would not have been subject to WTO provisions on non-discrimination.
In addition to their arguments that the measures were discriminatory, the EU and Japan also argued that the provisions constituted a prohibited subsidy inconsistent with the Agreement on Subsidies and Countervailing Measures (SCM Agreement).
It is understood that both arguments have now failed, with the Panel ultimately condemning the Ontario rules on the grounds they are discriminatory against foreign suppliers of equipment and components for renewable energy generation facilities.